Russia Ukraine News: Will Car Prices Rise Further? Know Here

Auto Price in India: The supply of electrical wiring, which was predominantly made in Ukraine, has been exceptionally low due to the ongoing Russia Ukraine war.

Car Price | New Delhi: Carmakers like BMW, Mercedes and Volkswagen have already slowed down the production of cars in various countries following a shortfall in semiconductor supplies. Since the onset of the Covid-19 pandemic, the demand for semiconductors has been high but the deficiency of essential components constraints has kept the supply rather slow. In this, the auto sector has been at the forefront of facing the brunt.

Semiconductor chips are important for the production of almost every electronic device, including laptops, mobile phones and automobiles. Companies have been escalating car prices to overcome the losses. However, a new factor, according to a report by Associated Press (AP), has become a major headache for car companies across the globe.

The supply of electrical wiring, which was predominantly made in Ukraine, has been exceptionally low due to the ongoing Russia Ukraine war. With the demand for cars not slowing down and the supply of raw materials still scarce, car prices across the globe are expected to rise further.

Along with new cars, the rates of second-hand cars have also been escalating. In the US alone, car prices have shot up by 13 per cent in the last one year. For used cars, the prices have surged by around 30 per cent, the report stated.

Inflation Soaring, Difficult For Car Buyers

With the prices of food, fuel and other essential supplies rising, consumers will most likely keep cars at the bottom of their wish list. Everything from wheat to milk has become costlier in the past 2 months. In India, fuel prices have been rising for the past 12 days, crossing the Rs 100 per litre mark in most cities.

The wire shortage will most likely, rise the care prices further, making it difficult for people to buy them. The report stated that as the demand for cars decreases, it may eventually lead to a cooling down of their prices. A classic example of demand-driven inflation.

Trouble For EV Manufacturers

For EVs, Russia is a major supplier of Nickel. It is an important component in manufacturing EV batteries. The supply has not been shut off, but it has not been free of aberrations either. Automakers, according to AP, may look for other options like recycling. But it will take months to shift to the new normal, at least for now.